Finance 2 February 2018

How to secure interest from an angel investor

Angel investor doing business
Angels want to know exactly what they stand to gain from a business arrangement
Here, chairman of the World Business Angel Investment Forum, Baybars Altuntas, provides Business Advice readers with guidance on securing interest from an angel investor in a startup.

Angel investment has enjoyed increased exposure in recent years, and when world leaders identified it as one of the crucial lifelines that would help bring stability and prosperity to the world’s economies, business owners and economists everywhere have taken notice.

Today, there is a wave of new entrepreneurs ready to get their businesses off the ground, but many are not sure how to go about seeking investment and gaining interest from an angel investor.

People, not projects

Although the business idea you present to an investor does have to be adequate, angel investors focus far more on the person who comes to them rather than the project they pitch, so give plenty of thought to the way you present yourself.

This includes your physical appearance, your demeanour and the words you use in your pitch. If you come across as an engaging and inspiring person, you are more likely to attract interest from an angel investor.

Elevator pitch

Angels have seen it all in business, and if you’re going to grab their attention, you are going to need to make your pitch succinct and captivating. So, forget the long, rambling presentation and work on perfecting your elevator pitch.

A good entrepreneur should be able to grab interest from an angel investor by explaining their key points around financing, the payback period and exit strategy. This should take just five minutes any longer and you are likely to lose an investor’s interest and come off as someone who’s not going to be an engaging person to work with.

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Exit strategy

Addressing a mutually-beneficial exit strategy during your pitch is a must, and it is common for entrepreneurs to get so caught up in starting a business relationship that they neglect to think of how they will ultimately finish it.

Angel investors want to know exactly what they stand to gain from a business arrangement and how much of their time it will require, so a firm exit strategy is vital for getting interest from an angel investor.

Know your angel

They may be experienced and wealthy, but this doesnt mean that an angel investor’s money is just there for the taking. If an angel invests in you, they want to know it is because you are a good match, and not just because you needed the funds they could provide.

So, research your prospective angel investors. Get to know their backgrounds, previous business arrangements and passions, if for no other reason than because they will give you a good indication of how good a match they would be for you.

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